June 7, 2007
Jefferson City, Mo. — An Illinois finance company is trying to collect more than $1 million in fraudulent debt from at least 40 Missouri small businesses and non-profits taken in by a telecommunications scam, Attorney General Jay Nixon says. Nixon is suing IFC Credit Corp., based in Morton Grove, to stop it from those collection efforts, to cancel any debt falsely claimed, and to require the company to pay back any Missourians defrauded by its actions. The lawsuit was filed Wednesday (June 6) in St. Louis County Circuit Court.
The businesses and non-profits had been customers of a now-defunct company called NorVergence, which was based in New Jersey. NorVergence rented “matrix” boxes that it claimed would integrate and provide telephone, wireless and Internet services while reducing telephone and Internet bills by 30 percent.
The boxes didn’t work as promised, and NorVergence was forced into bankruptcy. IFC and other finance companies had purchased the rental agreements from NorVergence and claimed that NorVergence customers were still responsible for the rental agreement payments, even though the equipment did not work. Nixon said IFC misrepresented consumers’ rights and obligations under the rental agreements and has made false claims in its collection letters to consumers.
“These customers were first sold a bill of goods by NorVergence for a product that was supposed to meet all their telecommunications needs,” Nixon said. “Now, even after NorVergence has collapsed, these finance companies are trying to make consumers pay for services they never received. We will protect Missouri small businesses and other consumers from those trying to collect fraudulent debts.”
Last August, Nixon obtained more than $461,000 in canceled debt for Missourians that another finance company, Popular Leasing USA, claimed was owed by former Norvergence customers. The company also paid $33,000 in refunds for debts already paid by the businesses. The 21-state settlement, which resulted in the cancellation of more than $15 million in NorVergence customer debt, was led by the Missouri Attorney General’s Office.